Investigating the feasibility of small-scale broiler farming

ENGLISH ABSTRACT: Small-scale farmers have the opportunity to gain access to markets through a contract farming
arrangement. The key question is whether it is financially feasible for a small-scale farmer to enter
into a contract.
The objectives of this study were to develop a model that could be used to determine the financial
feasibility of small-scale contract broiler farming in an intensive production system, compare three
different genotypes namely: Cobb500 males X Hybro G females, Ross 308 males X Potchefstroom
Koekoek females (crossbred) and the purebred Potchefstroom Koekoek, and evaluate current smallscale farmers’ broiler production by means of a case study. Financial performance indicators such as
the net present value, cash flow and profit and loss statements were used to analyze the feasibility of
all the scenarios.
The model was built in Microsoft Excel. Five hundred, 1500 and 2500 birds/cycle scale of production
were analyzed. Results revealed that based on the capital costs used, a 500 birds/cycle scale of
production was uneconomical and that a farmer would have to receive R25.01/kg broiler meat in
order to break even. The 1500 scale of production showed much better results. A farmer could break
even at R17.51/kg meat. The capital investment cost of the 2500 scale of production was so high that
the farmer would have had to sell his broiler meat for R18.54/kg.
Performance traits of genotypes were collected through an experiment and data was statistically
analyzed using ‘Statistica 9’. Results showed that there were significant differences between the
cumulative feed intake, feed conversion ratios and the European production efficiency ratio of the
different genotypes. No significant difference was found in the liveability of the genotypes.
Data on performance traits was used as input into the model so that the economic feasibility of the
genotypes could be compared. Results showed that a purebred Potchefstroom Koekoek genotype was
not suitable for an intensive production system and that the crossbreed did not perform as well as the
broiler breed, but that it would be worthwhile investigating the performance traits of the cross breed
under less optimal conditions or in a free-range system. The lower capital costs necessary for a freerange system, together with the high premium paid for free-range broiler meat, may give admirable
results in the economic feasibility of a small-scale broiler farm.